Court rejects EPA decision to reduce ethanol volumes

The U.S. Court of Appeals for the District of Columbia today rejected the Environmental Protection Agency's decision to reduce biofuel volumes due to inadequate demand.

"We agree with Americans for Clean Energy and its aligned petitioners (collectively referred to as 'Americans for Clean Energy') that EPA erred in how it interpreted the 'inadequate domestic supply' waiver provision," the ruling said.

"We hold that the 'inadequate domestic supply' provision authorizes EPA to consider supplyside factors affecting the volume of renewable fuel that is available to refiners, blenders and importers to meet the statutory volume requirements. It does not allow EPA to consider the volume of renewable fuel that is available to ultimate consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers.

"We therefore grant Americans for Clean Energy's petition for review of the 2015 Final Rule, vacate EPA's decision to reduce the total renewable fuel volume requirements for 2016 through use of its 'inadequate domestic supply' waiver authority, and remand the rule to EPA for further consideration in light of our decision."

The National Corn Growers Association applauded the U.S. Court of Appeals for the District of Columbia Circuit ruling and agreed that the EPA erred in how it interpreted and used the "inadequate domestic supply" waiver in the Renewable Fuel Standard law in setting renewable fuel volumes for 2014-2016.

The following is a statement from the National Corn Growers Association:

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"Today's court decision is a win for farmers, the biofuels industry and consumers. This ruling affirms our view that the EPA did not follow the law when it reduced the 2014-2016 renewable fuel volumes below levels intended by Congress. The Court held that EPA was wrong to interpret the phrase 'inadequate domestic supply' to mean 'inadequate domestic supply and demand.' We agree with the Court that effectively adding words to the law through this interpretation simply exceeds EPA's authority.

"We appreciate the Court honoring Congress' intent. Congress created the Renewable Fuel Standard to help increase American energy independence and provide cleaner fuel choices for consumers by opening a closed fuel market and forcing the oil industry to allow competition in. Whether there is an adequate supply of renewable fuel to meet volume standards is not the same as how much fuel is used. Or, in the Court's own words, 'The fact that a person is on a diet does not mean there is an inadequate supply of food in the refrigerator.'

"Corn farmers have done our part to help expand the supply of renewable fuel, as well as help support use of renewable fuels with retailers and consumers. We look forward to working with the EPA to ensure that going forward, the Agency follows the law when implementing the RFS."